Yen Clears 79.50, Bullish Formation To Take Shape
USDJPY - The ratio of long to short positions in the USDJPY stands at 5.73 as nearly 85% of traders are long. Yesterday, the ratio was at 4.21 as 81% of open positions were long. In detail, long positions are 8.0% higher than yesterday and 3.2% weaker since last week. Short positions are 20.6% lower than yesterday and 15.4% weaker since last week. Open interest is 2.5% stronger than yesterday and 0.3% below its monthly average. The SSI is a contrarian indicator and signals more USDJPY losses.
It seemed as though the short-term correction in the USDJPY was coming to an end as the pair broke out of the downward trending channel carried over from the previous month, but the Japanese Yen may continue to appreciate against its major counterpart as the 79.50 figure gives way. Indeed, it appears as though the bounce to 80.50 was a false-break, and the dollar-yen may continue to give back the advance from earlier this year as price action trades back within the bearish formation.
How do we interpret the SSI? Watch an FXCM Expo Presentation that explains the SSI.
--- Written by David Song, Currency Analyst
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